Wealthy Bucket Multi-Asset Investment Model
Economic
Country
Date
Event
Significance
Expectation
Trend
Country
Date
Event
Significance
Expectation
Trend
CHN
9/22/2014
HSBC Manufacturing PMI Flash
Merit Extra Attention
No Forecast
Up
EU
9/22/2014
ECB Pres. Draghi Speech
Market Moving Indicator
No Forecast
EU
9/22/2014
Consumer Confidence
Merit Extra Attention
Down
USA
9/22/2014
Existing Home Sales
Merit Extra Attention
Up
CAN
9/23/2014
Retail Sales M/M
Merit Extra Attention
Down
Can
9/23/2014
Retail Sales Y/Y
Merit Extra Attention
Up
GER
9/23/2014
Markit/BME Manufacturing PMI Flash
Merit Extra Attention
Down
GER
9/23/2014
Markit Services PMI Flash
Merit Extra Attention
> than previous
Up
JPN
9/23/2014
Markit/JMMA Manufacturing PMI Flash
Merit Extra Attention
> than previous
Up
USA
9/23/2014
Markit Manufacturing PMI Flash
Merit Extra Attention
Up
AUS
9/24/2014
RBA Gov. Stevens Speech
Market Moving Indicator
No Forecast
GER
9/24/2014
IFO Business Climate
Merit Extra Attention
Down
USA
New Home Sales
Retail Sales M/M
Merit Extra Attention
> than previous
Up
GER
9/25/2014
GFK Consumer Confidence
Merit Extra Attention
> than previous
Up
JPN
9/25/2014
Inflation Rate Y/Y
Market Moving Indicator
Up
USA
9/25/2014
Durable Goods Orders M/M
Merit Extra Attention
Flat
USA
9/25/2014
Initial Jobless Claims
Merit Extra Attention
> than previous
Down
USA
9/25/2014
Continuing Jobless Claims
Merit Extra Attention
Down
USA
9/25/2014
Reuters Michigan Consumer Sentiment
Merit Extra Attention
> than previous
Up
USA
9/25/2014
GDP Growth Rate Q/Q
Market Moving Indicator
> than previous
Up
Global Markets
GLOBAL MARKETS September 22, 2014
Week
Month
Year to Date
GLOBAL MARKETS September 22, 2014
Week
Month
Year to Date
US - S&P 500
-1.37%
-0.41%
+9.74%
US - DOW JONES INDUSTRIAL AVERAGE
+1.80%
+1.24%
+5.10%
US - NASDAQ COMPOSITE
+0.76%
-0.67%
+10.54%
US - RUSSELL 2000 - RUT
-1%
-2.76%
-0.33%
CHINA - SHANGHAI COMPOSITE
+0.12%
+4.07%
+10.29%
TORONTO STOCK EXCHANGE - TSX
-1.59%
-2.26%
+12.29%
GERMAN STOCK EXCHANGE - DAX
-2.02
+3.38%
+4.25%
LONDON STOCK EXCHANGE - FSTE 500 INDEX
-0.94%
-0.09%
+1.04%
SINGAPORE STRAITS TIMES INDEX - STI
+1.03%
-0.27%
+4.11%
STOCK EXCHANGE OF THAILAND - SET
+0.01%
+1.05%
+25.83%
JAPANESE STOCK MARKET - NIKKEI 225
+2.48%
-5.46%
-0.18%
HONG KONG - HANG SENG INDEX
+0.46%
+1.8%
+4.14%
AUSTRALIAN SECURITIES EXCHANGE - ASX
-1.49%
-3.49%
+1.21%
BOMBAY STOCK EXCHANGE - BSE - SENSITIVITY INDEX - SENSEX
+0.34%
+0.83%
+29.69%
BRAZIL STOCK EXCHANGE - BOVESPA STOCK INDEX
-1.22%
-5.48%
++14.8%
ITALIAN STOCK EXCHANGE FTSE- MIB
-0.16%
+5.28%
+13.15%
MoneyFlow Performance 2014
SYMBOL
DIRECTION
ENTRY
STOP
TARGET
DR/CR
ROI
SYMBOL
DIRECTION
ENTRY
STOP
TARGET
DR/CR
ROI
CL
Long
>$94.46
>$97.05
+43.46%
6E
Short
>$1.3196
+179.54%
TF
Long
>$1176.10
$1166.60
>$1198.90
-16.93%
NQ
Long
>$4053
>$4137.94
$1.35
-14.73%
MET
Long
>$51.78
>$55.38
+2.2%
T
Long
>$34.56
>$35.43
+1.54%
COF
Long
>$79.09
>$83.06
+2.1%
MXIM
Long
>$30.62
>$32.11
-0.19%
AXP
Long
>$87.75
>$91.46
-0.22%
FITB
Long
>$19.84
>$20.63
+2.5%
XLB
Straddle
$50.80
$52.41
$2.92
-10.95%
TF
Short
>$1170.60
+42.06%
XLK
Long
>$40.13
>42.49
+0.52%
MONTHLY TOTAL: +17.76%
G7 Currency Forecast
Euro Futures
This week, we look to the words from ECB President and provide guidance on the European economy and the currency. The economics within the Eurozone (ex-Germany) have not been impressive during; hence, the continued retreat of interest rates. Notice on a month-to-month basis the major economic indicators for the Eurozone have declined. Attention should be placed on the German indicators, as this economy is what can help sustain a continued bullish sentiment. Since the rate cut we had warned about 2 weeks ago, the Euro has been getting slammed and the speech from Draghi may help revive some confidence into the currency. We have maintained our short position since the rate cut and will hold going into the conference.
Euro Futures 1 Year Daily Chart
We have revised the Euro graph for the new week. Immediate resistance has been identified between $1.2929-$1.2995. We are anticipating a test of this level possibly ahead of the speech. As long as this level holds, then, short positions in Euro can be maintained and there is the option to add to existing shorts. Intermediate support, which also constitutes a level not seen since October 2012 and is our next target for Euro in the event Immediate resistance holds has been set between $1.2663-$1.2711.
British Pound Futures
Sterling traded into our immediate resistance level this past week and looks to continue its decent. As immediate support was tested back on September 9-10 and the level looks to have been taken out. This would imply that we anticipate that Sterling will arrive down to intermediate support between $1.5845-$1.5924. The graph will not require maintenance going into the new week as all levels are being respected.
British Pound Futures 1 Year Daily Chart
Swiss Franc Futures
We continue the new week with the expectation that Franc will simply follow Euro’s lead. It is not necessary to short both currencies, as the risk will be too high in the event the trade moves in the opposite direction. We have identified long-term support for Franc between $1.0358-$1.0402 in the event Euro continues to slide on Draghi’s comments and immediate support does not hold. All other levels will be maintained for the new week, as they are being respected.
Swiss Franc Futures 1 Year Daily Chart
Australian Dollar Futures
Governor Stevens will be having his monthly conference as well this week. Like the Euro, the Aussie has come under significant selling pressure over the past 2 weeks. As it stands, the Aussie looks to be headed towards long-term support between $0.8713-$0.8764. A short can be entertained, if the Aussie retraces back up to the low of Thursday September 18, 2014, then, rallies away (down).
Australian Dollar Futures 1 Year Daily Chart
Canadian Dollar Futures
The Loonie graph will not require maintenance going into the new week as all levels are being respected. Based on the graph, we are anticipating that Loonie will travel down to the 52-week low. The commodity currencies have been under pressure. Look for Aussie to lead the way as the two are currently in a positive correlation with each other.
Canadian Dollar Futures 1 Year Daily Chart
Japanese Yen Futures
The Yen has traded through our immediate support level that was identified last week. The level was fairly wide and was based off a weekly timeframe as Yen is trading into multi-year lows. Based on the current negative relationship between Yen and equities, it will be a positive sign for stocks should Yen continue its decent down to the next anticipated target between $0.008712-$0.008890. The graph will not require maintenance going into the new week as all levels are being respected.
Japanese Yen Futures 1 Year Daily Chart
U.S. Dollar Futures
Currently, the correlation/relationship between Dollar and stocks is positive. Since we are expecting headline risk from Euro this week, we will move away from using Dollar as a leading indicator of stock market direction and simply look to Yen. From a G7 economic perspective, the U.S. maintains to be the most robust economy. As a proactive investor, it is suggested to watch the U.S. indicators closely; should U.S. economics turn flat, then, there may be cause for concern of slowdown since the Eurozone is growing at a very slow pace if at all. The graph will not require maintenance going into the new week as all levels are being respected.
U.S. Dollar Futures 1 Year Daily Chart
Commodity Forecast
Crude Futures
In last week’s note, we mentioned our expectation of continued weakness in energy prices. Crude traded flat for the week and gave back gains experienced from the first two trading sessions at the beginning of the week. We had identified a short on Sunday September 14th that was momentum based and since crude did pivot back upwards, we were not able to enter into the position. Our forecast will be maintained for the new week as we expect crude to trade down to the $88.18-$89.65, level. The graph will not require maintenance going into the new week as all levels are being respected.
Crude Futures 1 Year Daily Chart
Copper Futures
Copper performed similar to crude this past week. There was an initial spike in interest and the momentum faded as the week progressed and copper finished where it started. The graph will not require maintenance going into the new week as all levels are being respected.
Copper Futures 1 Year Daily Chart
Natural Gas Futures
Natural gas continues to trade within the tight range we had identified a number of weeks ago. The risk to reward profile is not attractive at these levels to warrant opening a position. The graph will not require maintenance going into the new week since the levels are being respected.
Natural Gas Futures 1 Year Daily Chart
Gold Futures
Gold has traded into our immediate support level and as you can see, the buyers have not presented themselves, yet. Since the price of gold has traded and closed below our immediate support level, we are going to expect that the precious metal will trade down to long-term support between $1181.30-$1194.30. We are not short gold; however, short positions in gold can be maintained as long as immediate support is traded through even after it has been tested. The graph will not require maintenance going into the new week as all levels are being respected.
Gold Futures 1 Year Daily Chart
Wheat Futures
As price has traded into the major level this week, we will not be attempting any engagement with the commodity until it trades through and into the new level we had identified last week. We feel that there is more downside risk with this grain. The graph will not require maintenance going into the new week as the levels are being respected.
Wheat Futures 20 Year Monthly Chart
Soy Futures
Soy has traded into a major level this past week, as well. We will take a wait and see approach before engaging. We would like to see price turn around and close away from the level before engaging. That said, if pressure remains in wheat and corn, there will be the probability that soy will remain under pressure, as well. The graph will not require maintenance going into the new week as the levels are being respected.
Soy Futures 20 Year Monthly Chart
Corn Futures
As price has traded into the major level this week, we will not be attempting any engagement with the commodity until it trades through and into the new level we had identified last week. We feel that there is more downside risk with this grain. The graph will not require maintenance going into the new week as the levels are being respected.
Corn Futures 20 Year Monthly Chart
We believe the Equity markets move in a direction based on the correlation to Currency and Commodity markets. This is exactly the reason why the Multi-Asset Investment Model is used as our indicator of market direction and conviction of money flows. Once the analysis arrives at the Index Future, Broad Market and Sector forecast segments of the commentary; most of the heavy lifting has been completed. All that remains are the trend and levels that may require adjustment for market timing purposes. When used consistently, the multi-asset investment model can time market moves with a high degree of accuracy.
Index Futures Forecast
S&P Futures
Immediate support has been raised to 1982.25-1997.50 for the upcoming week. Fresh long positions should be avoided unless the index trades into and rallies away from the new level. Ideally, the most attractive level to enter into fresh bullish positions will be at intermediate support levels. All other levels and guidance will remain from the previous week as they are being respected.
S&P Futures 1 Year Daily Chart
Dow Futures
Immediate support has been raised to 16,988-17,103 for the upcoming week. Fresh long positions should be avoided unless the index trades into and rallies away from the new level. Ideally, the most attractive level to enter into fresh bullish positions will be at intermediate support levels. All other levels and guidance will remain from the previous week as they are being respected.
Dow Futures 1 Year Daily Chart
NASDAQ Futures
Immediate support has been raised to 4037.25-4072.25 for the upcoming week. Fresh long positions should be avoided unless the index trades into and rallies away from the new level. Ideally, the most attractive level to enter into fresh bullish positions will be at intermediate support levels. All other levels and guidance will remain from the previous week as they are being respected.
NASDAQ Futures 1 Year Daily Chart
We maintained a long position at the beginning of the previous week that was stopped out for maximum loss. We will look to engage the index, again.
NASDAQ Futures 1 Year Daily Chart
Russell Futures
As the index looks poised to breakout in a direction, we are preparing our levels to provide the timeliest information. Immediate resistance has been revised to 1155.80-1165.50 and intermediate support has been installed at 1115.20-1123.30. The index is currently trading at immediate support.
Russell Futures 1 Year Daily Chart
Along with our bullish NASDAQ idea, we maintained a bearish Russell index idea, over the last 2 weeks for the most part. We are prepared to exit the idea should price trade above the current level.
Russell Futures 1 Year Daily Chart
Broad Market Forecast
S&P 500 Index
Immediate support has been raised to 1991.29-2003.57 for the upcoming week. Fresh long positions should be avoided unless the index trades into and rallies away from the new level. Ideally, the most attractive level to enter into fresh bullish positions will be at intermediate support levels. All other levels and guidance will remain from the previous week as they are being respected.
S&P 500 Index 1 Year Daily Chart
Dow Jones Industrial Average
Immediate support has been raised to 17,028.14-17,170.85 for the upcoming week. Fresh long positions should be avoided unless the index trades into and rallies away from the new level. Ideally, the most attractive level to enter into fresh bullish positions will be at intermediate support levels. We have identified additional guidance for the index this week. We are forecasting that the Dow Jones should head towards 17,562.30 and 17,729.57 provided that the economic remain positive.
Dow Jones Industrial Average 1 Year Daily Chart
NASDAQ Composite Index
Immediate support has been raised to 4535.36-4564.19 for the upcoming week. Fresh long positions should be avoided unless the index trades into and rallies away from the new level. Ideally, the most attractive level to enter into fresh bullish positions will be at intermediate support levels. All other levels and guidance will remain from the previous week as they are being respected.
NASDAQ Composite Index 1 Year Daily Chart
Russell 2000 Index
Due to the expected breakout from the index, we have first installed intermediate support between 1118.76-1129.97; then immediate resistance has been installed between 1155.07-1164.86. In the event the index breaks to the upside we have identified 1197.58-1206.78 as guidance. We are waiting for the index to test intermediate support before installing additional levels and targets in the event the index breaks to the downside.
Russell 2000 Index 1 Year Daily Chart
Sector Forecast
Industrials
We have made a slight revision to immediate support this week. The level has been revised to $53.68-$54.11. All other levels and guidance will remain from the previous week. The sector is illustrating an attractive upside. It is suggested to wait for the sector to trade back down and into immediate levels before engaging.
Industrials Sector ETF 1 Year Daily Chart
Financial
We have made a slight revision to immediate support this week. The level has been revised to $23.31-$23.55. All other levels and guidance will remain from the previous week.
Financial Sector ETF 1 Year Daily Chart
We have maintained bullish stock positions within the financial sector since the pivot back on August 8, 2014. Not all positions have provided the performance that we had hoped for; others have performed as expected. Our expectation was that the financial sector would provide an attractive reward since it was one two sectors that had yet to trade back to 2007, highs.
Symbol: MET
Entry Date: August 12, 2018
ROI: +8.3%
Symbol: AXP
Entry Date: August 19, 2018
ROI: +2.22%
Symbol: COF
Entry Date: August 12, 2018
ROI: +6.56%
Symbol: FITB
Entry Date: August 15, 2018
ROI: +5.4%
Materials
During our forecast 2 weeks ago, we had anticipated that the sector would breakout in either direction and we were inaccurate with the forecast. The sector has traded back to the level of consolidation. We had engaged a Straddle position that has been losing money, so far. We will look to close out the position in the event the consolidation or lack of direction continues.
Materials Sector ETF 1 Year Daily Chart
The graph will not require maintenance going into the new week as all levels are being respected from the previous week’s forecast.
Materials Sector ETF 1 Year Daily Chart
Transportation
As long as the economics remain positive, this sector is illustrating an attractive reward profile. We have identified additional guidance at $161.27 and $163.74, respectively. It is suggested to wait for the sector to trade down to immediate or intermediate support levels before engaging a position. Immediate support has been raised to $152.54-$154.09 for the upcoming week. All other levels will not require maintenance as they are being respected.
Transportation Sector ETF 1 Year Daily Chart
Retail
The graph will not require maintenance going into the new week as all levels are being respected. That said, the levels are too close to one another making the profile for a position unattractive.
Retail Sector ETF 1 Year Daily Chart
Utilities
The graph will not require maintenance going into the new week as all levels are being respected. The sector is illustrating an attractive upside; however, it may be advantageous to wait for price to trade down to intermediate levels, first.
Utilities Sector ETF 1 Year Daily Chart
Health Care
The graph will not require maintenance going into the new week as all levels are being respected.
Health Care Sector ETF 1 Year Daily Chart
Technology
Along with the financial sector, the technology space has yet to return to its highs from 2001. We felt that there would be considerable upside potential as long as the economics allowed for continued expansion. This was the other sector we have been bullish in. The graph will not require maintenance going into the new week as the levels are being respected.
Technology Sector ETF 1 Year Daily Chart
For the past 2 weeks we have held the ETF position; however, it has not provided much in terms of return. We will hold the position going into the new week. there is very little room to maneuver, so the stop-loss instructions will not be revised.
Technology Sector ETF 1 Year Daily Chart
There were 2 remaining technology plays that we held from August through to the most recent week. We have been slightly disappointed with their performance and one of the ideas were profitable and ultimately were sold at a loss.
Symbol: MXIM
Entry Date: August 15, 2018
ROI: -1.62%
Symbol: T
Entry Date: August 12, 2018
ROI: +2.63%
Consumer Discretionary
The graph will not require maintenance going into the new week as all levels are being respected.
Consumer Discretionary Sector ETF 1 Year Daily Chart
Energy
As mentioned earlier, our expectation for energy prices, namely crude, was to continue to trade lower for the week. The selling did not occur till later in the week, which voided our short energy sector idea, momentarily. The graph will not require maintenance going into the new week as all levels are being respected.
Energy Sector ETF 1 Year Daily Chart
World Markets
India
The graph will not require maintenance going into the new week as all levels are being respected.
India ETF 1 Year Daily Chart
Germany
The graph will not require maintenance going into the new week as all levels are being respected.
Germany ETF 1 Year Daily Chart
Japan
The graph will not require maintenance going into the new week as all levels are being respected.
Japan ETF 1 Year Daily Chart
China
The graph will not require maintenance going into the new week as all levels are being respected.
China ETF 1 Year Daily Chart
Last week, we had anticipated that the Chinese market would pivot back upward and the risk to reward profile was attractive. The sector traded through our entry price and the idea was not engaged.
Brazil
The graph will not require maintenance going into the new week as all levels are being respected.
Brazil ETF 1 Year Daily Chart
Russia
The graph will not require maintenance going into the new week as all levels are being respected.
Russia ETF 1 Year Daily Chart
Summary
We will maintain our short Russell position into the week. It is suggested that any new bullish positions should occur when the major indices trade down and into their respective immediate support levels.
It is not conducive for equity markets if the Russell continues to trend lower. This will be the index that will warrant attention. Should the Russell continue lower, then, we expect the other major U.S. markets to follow. That said, the trend for the other markets are still up. It is suggested to prepare bullish positions at immediate and intermediate levels for the U.S. stock indices. It is out of your control as to which level the index will respect; hence, the suggestion to place orders at both levels. In the absence of a significant retracement within the indices, it is also suggested to identify opportunities using the stock indices rather than single stock opportunities for the new week. We will be using the Yen as our main indicator for the week and moving away from Dollar/Euro as there remains significant headline risk due to the pending conference from ECB President Draghi.
Have a great week!